Serene Sound produces a high quality audio tape used in the recording industry. Serene allocates variable overhead to production at a rate of $12 per batch manufactured. The company's monthly fixed overhead costs average $72,000. An average of 500 batches per month is considered normal. During June, Serene produced 450 batches of audio tape and incurred actual overhead costs of $79,500.
-Compute the following amounts:
a) Total overhead applied to production in June amounted to $__________.
b) Total overhead budgeted in June for the 450 batches manufactured amounted to $__________.
c) Serene's overhead spending variance was $__________ (favorable/unfavorable).
d) Serene's overhead volume variance was $__________ (favorable/unfavorable).

Question

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The Answer of Serene Sound produces a high quality audio tape used in the recording industry. Serene allocates variable overhead to production at a rate of $12 per batch manufactured. The company's monthly fixed overhead costs average $72,000. An average of 500 batches per month is considered normal. During June, Serene produced 450 batches of audio tape and incurred actual overhead costs of $79,500.
-Compute the following amounts:
a) Total overhead applied to production in June amounted to $__________.
b) Total overhead budgeted in June for the 450 batches manufactured amounted to $__________.
c) Serene's overhead spending variance was $__________ (favorable/unfavorable).
d) Serene's overhead volume variance was $__________ (favorable/unfavorable).

Serene Sound Produces a High Quality Audio Tape Used in the Recording